State of California Archives: on Budget & Economy

Jerry Brown:
Ping-pong budgeting makes no sense

In earlier years, Brown was jokingly called "Gov. Moonbeam." But Brown today is grounded much more on earth than in outer space--sometimes to his own party's chagrin. After years of harsh cuts during the recession, Democrats were disappointed that
Brown's proposed budget this year called for socking away billions in a rainy-day fund for future emergencies, rather than restoring some of those cuts.

California's current budget windfall has come almost entirely from a rebounding stock market, and
from billions in revenue generated by a capital gains tax--the most volatile revenue stream. Brown, scarred by budget battles both a few years ago and a few decades ago, said the state should save money in the good years to pay for the bad years.

"I
think that kind of ping-pong budgeting, where first you ping and then you pong, makes no sense," Brown said. "It's cruel budgeting to propose a spending program and then have to finance it two or three years from now by cutting somebody else's program."

Jerry Brown:
Follow advice from Book of Genesis: out away some surplus

While we know our revenues will fluctuate up and down, our long-term liabilities are enormous and ever growing. We also must account for future risks that could negatively affect our budgets like congressional decisions and natural disasters.

So we can't go back to "business as usual." Boom and bust is our lot and we must follow the ancient advice, recounted in the Book of Genesis, that Joseph gave to the Pharaoh: Put away your surplus during the years of great plenty so you will be ready
for the lean years which are sure to follow.

Most governors and legislatures--in modern times--have forgotten this advice. This time we won't do that. We will pay down our debts and remember the lessons of history.

Fiscal discipline is not the
enemy of our democracy but its fundamental predicate. To avoid the mistakes of the past we must spend with great prudence and we must establish a solid rainy day fund, locked into the Constitution.

Source: 2014 State of the State Address to California legislature
Jan 22, 2014

Neel Kashkari:
Ran program to bail out the nation's largest banks

"California is like a rocket ship with multiple engines running at half throttle," Kashkari said. "We need to be competitive; we need to be in the hunt. We're not, but we can be."

Kashkari previously worked for Goldman Sachs and ran a controversial
Treasury Department program that bailed out the nation's largest banks. He called that experience an example of the bipartisan compromises he hopes to strike in California.

Last year, Kashkari quit his job as an investment banking executive and began
traveling across the state and mulling his run for governor, meeting with potential donors, community organizations and regular Californians. He said he formed his campaign platform--creating jobs and fixing schools--by spending time in a homeless
shelter, meeting with Central Valley farm workers and listening to average Californians discuss their unmet needs. "People don't want welfare; they want jobs," said Kashkari, who did not elaborate on his policy positions.

Jerry Brown:
$27B budget gap then; multibillion-dollar surplus now

Brown noted the recent shift in how the rest of the nation views California, now that the state has closed a $27-billion budget gap from when Brown began his term in 2011.
Instead of being viewed as a failed state, Brown said, California has regained its reputation as an engine of innovation and creativity.

"California is still a very yeasty place," he said, noting the state's record for companies that develop new technologies that grow into major industries.
He said the state now has multibillion-dollar surpluses that can continue for the next several years if state lawmakers spend responsibly.

Jerry Brown:
Proposes balanced budget and $12.5 billion in cuts

I am proposing a balanced budget that cuts $12.5 billion from proposed state spending. It's time to restore California to fiscal solvency and put us on the road to economic recovery and jobs.
Since it's going to take time to fully implement the restructuring program, I'm going to ask for five years of extension of existing current taxes. This will allow the restructuring to proceed in an orderly way.

Sam Granato said he opposes amending the US Constitution to adopt California-style rules for the federal budget. "Delayed tax refunds, forced work-reduction furloughs, paying small business vendors with IOUs, court ordered tax increases, downgraded bond
ratings, increased interest rates. All of these things have happened in California because of rules that prevent responsible budgeting. This is a future that I do not want to see for the US. We are better than that," Granato said.

Granato's comments
come on the heels of Gov. Arnold Schwarzenegger's declaration of a "fiscal state of emergency" in California on Wednesday, a dire situation that was created by the state's inflexible budget laws and ensuing political gridlock. Mike Lee, Granato's
GOP opponent, has supported adding similar rules on the federal level by amending the US Constitution.

Granato said he opposes a so-called Balanced Budget Amendment because it will invariably result in draconian cuts that will hurt average Americans.

[In this year's economic recession] we did what we had to do. We made painful spending cuts. We passed temporary tax increases. We permanently eliminated COLAs for most state programs and we made major reforms in welfare and parole.

$11 billion in water bonds will be on the ballot this November. Some people say "how can we afford these bonds in the current economic climate?" I say, how can we not?

Source: California 2010 State of the State Address
Jan 6, 2010

Bill Jones:
Concerned about higher federal spending

I am concerned about higher federal spending, although some is justifiable because of the rebuilding of Afghanistan and Iraq and anti-terrorism demands. “Proper tax policies combined with controls on discretionary spending can get us there,
but only if we remember that a good economy sets good tax policy, not the other way around.”

Bill Jones:
Stop subsidizing the rest of the country

We need to change how government works, ensure corporate responsibility, but also provide the level playing field for California. Jones also believes it is time California stopped subsidizing the rest of the country. For every $1 sent by California
taxpayers to Washington, we receive only 70 cents back in federal services and programs. Jones will fight for a more equal share of federal spending in all program areas, to keep federal dollars in our state supporting California jobs.